Whoa! There was no peep from this Emmer guy or any of his buddies when the Fed was shooting money cannons at Wall Street for the last 14 years, but when there is some remote chance of them pissing in the direction of regular people…. “No, we cannot allow it to happen!”
StukiMoi
2 years ago
“Rep Emmer Introduces a Bill to Prohibit Fed Issuance of Money to Individuals..”
But alas, issuance of money to any other harebrained constellation boiling down to nothing more than, tah-dah, INDIVIDUALS, is a-ok… Just have to make up some trivial, childish obfuscating middle”man”, you know! And then, issuing as much money as one wants to, what still amounts to, tah-dah, INDIVIDUALS, are, yeah, a-ok!
Woudn’t be a proper Idiotopia, if it wasn’t ran by idiots, I suppose…
If monkeybrain was anything other than one, he’d leave out the “to individuals” part. Not doing that, renders the whole thing nothing more than yet another in a near endless series of trivially childish drivel without any real meaning at all.
Salmo Trutta
2 years ago
The banksters have their cake and eat it too. The ABA should be barred from the House and Senate banking committee’s meetings. As such, they own the legislators, being the most influential contributors of money to those officials.
Salmo Trutta
2 years ago
It’s a crime. The banks should not have the prerogative of creating new money. That should be the non-bank public’s privilege.
I think it will be a tell…as to whether this can get traction or not. I’m guessing the answer will be a resounding no….or maybe just a quiet shove under the rug.
Ironic that Brainard is even now talking the hawkish talk before Congress. They should hook up candidates to a lie detector at those confirmation hearings. If she (or should I say when she?) makes Fed Chairwoman, she would love to send out the helicopter money.
#MMT
thimk
2 years ago
I would like to know who was behind Biden’s Marxist nomination. The fact that we are discussing this at all is deeply disturbing. A number of Latin American countries are seriously tilting ultra left . You think we have a border problem now .
No way the Dems keep the house in the mid-terms or the Whitehouse in ’24. (Unless Trump gets the nomination, which is seeming less and less likely.)
Doug78
2 years ago
The Fed has
been looking for ways to send money directly into people’s accounts for years
now because of the obvious utility of doing so if it becomes necessary to
stimulate the economy. Instead of relying on giving money to the banks and
hoping the money will “trickle down” by send money directly you eliminate the middleman
so it makes sense.
The Fed can
send me money directly to my account without having access to all my
transactions just like any company transfers money into my account for services
rendered. There is no need for an account at the Fed although my bank will take
its customary cut on the transfer. Financial privacy is maintained. If
everyone had one bank account there would be no problem but many people have
several so overpayment would be a problem consequently somehow the Fed has to
know some details and that is what the author is objecting to. The IRS has
those details and more too so they could do it easily. If the Fed wants to send
you money have them do it through the IRS with a bank transfer just like they
do already when you overpay. It is also useful to use the IRS if you want a
cut-off point above a certain income. Some people are unbanked so we will have
to find a workaround for them but they are a small minority. Logically it should be the IRS because they already have the details and the means.
Of course if you are worried about the control aspect then you better live isolated in the backwoods somewhere far away because the privacy issue ship sailed long ago.
For or agin what exactly? I am for that the stimulus money goes directly to
the individual instead of through intermediaries who steal most of it. I am not
for government knowing everything about me nor am I for companies knowing
everything about. I don’t like his proposal because it throws away the baby
with the bathwater. Frankly I see it as a veiled attempt to keep the old system
of economic stimulation through intermediaries when I feel that that is no
longer a good way. A few posts ago I put up this graph as asked what are the
differences between the 1990, 2001 and the 2008 recessions compared to those
before and after.
In 1990, 2001 and 2008 we used monetary policy exclusively to get out of
the recessions while protecting the financial actors from the consequences of
their mistakes. That didn’t happen before 1990. Those recessions were long and
the climb back was painful for 90% of the people. The recessions before were
sharp but so was the rebound because financial institutions rapidly corrected
their mistakes. In 2008, thanks to Obama’s stupidity and his subservience to
the class that brought him to power, gave us the most damaging recession for
many decades. The stimulus was given to the financial institutions who
basically stole it and there was little that tricked down.
Monetary policy is a powerful tool but for it to work you need to allow
financial institutions to go bankrupt because of their bad decisions and if you
bail out those institutions instead of allowing them to fail those same
institutions find ways to siphon off the money to their own benefit. Greenspan
put an end to financial institutions risking bankruptcy and he also put an end
to letting the market decide interest rates. He was the Maestro who thought
that markets were to be managed and not free contrary to his former reputation.
He would give a very select group a heads up on what he would do before the
market knew and that is not a speculation. In our present society where corporate money
controls much of the political process you can no longer expect these
institutions to go bankrupt because of their political pull. However if this
continues history has shown many times that it will not end peacefully. The
only solution, and it is not the best one but the only one, to avoid this is to
send stimulus money directly to people so they use it.
If in the future if we allow financial institutions to go bankrupt then we
could change back to the’ more sane policies but until then we have to do
it this way. If you bail out Wall Street you have to bail out Main Street also.
That’s the deal now and if the powers that be don’t accept it then they run a
big existential risk.
I would say that the majority of stimulus money went to well-placed larger businesses and the politically connected…. and Main Street got far less, even in this last go-round..but at least it wasn’t just banks.
I was asking if you were for or against direct stimulus…poorly worded, but you answered well. I think you’e right again.
I agree that in the long run that propping up zombie banks and zombie corporations is worse than letting them go tits up. But I don’t like to see masses of people losing jobs and not being able to service their debts, either.
I have often benefited from Fed policy, but it is because I aligned myself with it, on purpose. I think a wise investor understands you must do that….just playing the game the way it works out best. Certainly Wall Street benefit most, but ordinary people can use the same general methods to try to accumulate wealth, albeit at a slower pace. Too many people fail to grasp that, and it keeps them poorer than they have to be.
Much went
to big business but much went to small businesses like yours and without it
they would have been in big trouble. In 2008 outside of the financial
institutions only the car companies were bailed out. Everyone else were on
their own and resulted in the weakest rebound ever and caused extreme damage to
workers, businesses and it lasted several years. This time money was given out
to individuals, small and medium businesses and big businesses and the result
is a strong rebound. Too bad it was so lopsidded in 2008. History would have
been different otherwise.
RonJ
2 years ago
“Not only does this CBDC model raise “single point of failure” issues,
leaving Americans’ financial information vulnerable to attack, but it
could be used as a surveillance tool that Americans should never be
forced to tolerate from their own government.”
Like we were forced to tolerate economic lockdowns, over a virus that was actually largely treatable by April 2020. Trump announced HCQ on March 19, referring to a letter from Dr. Zelenko.
Like we were forced to tolerate the Patriot Act.
It is getting to be that there will be surveillance cameras at every intersection. How long until Google knows what everyone is doing on the internet? Or do they already?
It is just a matter of time and a new financial crisis, that people will tolerate a new intrusion on their liberty.
I say lets let our government create a digital currency that is monitored and tracked. That way if politicians continue to get rich or any other forms of illegal activity continue to be funded like illegal drugs, it will be a clear message to all American citizens that it’s our time once again.
“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants” -Thomas Jefferson
Machiavelli did not say ‘Never let a crisis go to waste’, he was far smarter than that. Now, Churchill may have, referring to Yalta. However, Rahm Emanuel did say it.
However, Machiavelli is alleged to have said, “never waste the opportunity offered by a good crisis.” That said, it does not appear in any of his writings. 🙂
100% correct. NSA already uses AI to watch all our texts and emails etc………….for any domestic terrorism threats. anyone thinking they have privacy is seriously delusional. the ancient hawala system still works, however.
1-shot
2 years ago
This is our government beginning to lay the groundwork to get into the digital currency arena and gradually take it away form the bitcoins and ethers and dogecoins of the world rather than simply shutting them down or outlawing them like China did.
They want control over digital currency and frankly, I’d rather have my digital dollars backed and regulated by a stable US government than the Tether and Dogecoin operators and scammers of the world. Just ask any of the EthereumMax owners who followed Kim Kardashian’s and Floyd Mayweather’s advice and lost 98% of their investments.
We already have digital currency. There’s way more money than bills in circulation. I think over 90% is digital. I think you mean digital currency backed by blockchain. I doubt the government would adopt that. They would lose the ability for the FED to create money out of thin air.
exactly kidhorn. you are on a roll of seeing reality of what we have. most of our paper bills are outside our borders, too. the benjamins will be traded for another 50 years from mexico to russia on street and shops of the world.
Bam_Man
2 years ago
“New & Improved” fake money.
KidHorn
2 years ago
I don’t see how it makes a difference. Right now, the FED doesn’t give money directly to anyone, but they effectively do. The way it currently works is the government announces stimulus payments that they can’t afford. They fund it by issuing debt that is purchased by primary dealers. The primary dealers sell the debt to the FED for a profit. The FED bought it with printed money. Part of the QE process. And they pretend it’s not monetizing the debt because the debt isn’t purchased directly from the government. Even though the whole thing is arranged in advance with the primary dealers. We would be better off if they did buy it directly from the government. No primary dealer middle man. So the FED prints the money that ends up in stimulus payments.
The FED prints and loans money to the federal government at essentially 0% interest. And then the federal government gives it away as stimulus checks. While technically you’re correct, the end result is the same.
The difference is the current way requires passing legislation.
It’s an important distinction though because it means unelected people aren’t giving away money. Not just because of the vote buying aspect but because it means the government (and in theory us voters, LOL) retain control over how much and when. Otherwise any crazy fed governor at any time could turn on the spigots and crash the dollar or do some other favor for friends or foreign powers etc.
It can get worse. Some opine that the sitting government should print as much money as it needs, bypassing even the artificial hurdle of selling bonds. Not that it matters in practice, the system is so broken, it had to streamline away artificial hurdles.
as the KIDHORN states, the fed already gives the money away. just a 3 card monty game of using primary dealers markups and the treasury. already has been going on for decades now. especially in crisis.
BINGO. we have a winner. the most cogent and clear explanation of how the government and the fed, “create via computer key strokes” our money. hat tip kidhorn.
PreCambrian
2 years ago
Fairly useless bill and just playing to his supporters. If the Fed issued any funds directly to individuals it would still need to be approved by Congress since it is a fiscal not a monetary item. If the Fed is restricted from doing so then the Treasury would do it. Secondly I wouldn’t be worried about losing the dollar’s reserve status. It is the reserve status which allows the continual hollowing out of the country’s manufacturing capabilities. Loss of reserve status would almost be equivalent to a return to the gold standard and force a reasonable balance of trade upon the United States. At first this would be accomplished by a huge devaluation of the dollar but eventually we would develop our own capabilities.
“If the Fed issued any funds directly to individuals it would still need to be approved by Congress since it is a fiscal not a monetary item.”
…
Exactly.
Two roadblocks if Federal Reserve attempted to go rogue.
1) For the sake of this argument, Federal Reserve a few thousand economists. Nothing more. In the US > 100 million households. They would need Federal agencies (Executive Branch) which are funded by Congress (Legislative Branch) to provide the needed information (names, addresses, ages, SSNs, etc.).
2) No way do I see Congress giving up The Power of the Purse. EVER. THEY want to be the ones to shower constituents with $$s (to buy votes).
Wanna bet that China and Russia will implement a gold-based crypto unit for international trade within the next five years? They have the gold and the clout; all they need is the right crisis. At that point, the US dollar is finished as the world’s reserve currency.
i’d argue that lots of gold standards in past, like the pound, there does not have to be a huge amount of gold backing a currency, just the implied promise of convertibility. i’d suggest it would be more of a prestigious sort of thing for russia or china to do this. not really going to make them stronger FX from the gold backing necessarily. much more needs to happen for that to happen.
Stay Informed
Subscribe to MishTalk
You will receive all messages from this feed and they will be delivered by email.
The Fed has
been looking for ways to send money directly into people’s accounts for years
now because of the obvious utility of doing so if it becomes necessary to
stimulate the economy. Instead of relying on giving money to the banks and
hoping the money will “trickle down” by send money directly you eliminate the middleman
so it makes sense.
The Fed can
send me money directly to my account without having access to all my
transactions just like any company transfers money into my account for services
rendered. There is no need for an account at the Fed although my bank will take
its customary cut on the transfer. Financial privacy is maintained. If
everyone had one bank account there would be no problem but many people have
several so overpayment would be a problem consequently somehow the Fed has to
know some details and that is what the author is objecting to. The IRS has
those details and more too so they could do it easily. If the Fed wants to send
you money have them do it through the IRS with a bank transfer just like they
do already when you overpay. It is also useful to use the IRS if you want a
cut-off point above a certain income. Some people are unbanked so we will have
to find a workaround for them but they are a small minority. Logically it should be the IRS because they already have the details and the means.
For or agin what exactly? I am for that the stimulus money goes directly to
the individual instead of through intermediaries who steal most of it. I am not
for government knowing everything about me nor am I for companies knowing
everything about. I don’t like his proposal because it throws away the baby
with the bathwater. Frankly I see it as a veiled attempt to keep the old system
of economic stimulation through intermediaries when I feel that that is no
longer a good way. A few posts ago I put up this graph as asked what are the
differences between the 1990, 2001 and the 2008 recessions compared to those
before and after.
link to blogger.googleusercontent.com
In 1990, 2001 and 2008 we used monetary policy exclusively to get out of
the recessions while protecting the financial actors from the consequences of
their mistakes. That didn’t happen before 1990. Those recessions were long and
the climb back was painful for 90% of the people. The recessions before were
sharp but so was the rebound because financial institutions rapidly corrected
their mistakes. In 2008, thanks to Obama’s stupidity and his subservience to
the class that brought him to power, gave us the most damaging recession for
many decades. The stimulus was given to the financial institutions who
basically stole it and there was little that tricked down.
Monetary policy is a powerful tool but for it to work you need to allow
financial institutions to go bankrupt because of their bad decisions and if you
bail out those institutions instead of allowing them to fail those same
institutions find ways to siphon off the money to their own benefit. Greenspan
put an end to financial institutions risking bankruptcy and he also put an end
to letting the market decide interest rates. He was the Maestro who thought
that markets were to be managed and not free contrary to his former reputation.
He would give a very select group a heads up on what he would do before the
market knew and that is not a speculation. In our present society where corporate money
controls much of the political process you can no longer expect these
institutions to go bankrupt because of their political pull. However if this
continues history has shown many times that it will not end peacefully. The
only solution, and it is not the best one but the only one, to avoid this is to
send stimulus money directly to people so they use it.
If in the future if we allow financial institutions to go bankrupt then we
could change back to the’ more sane policies but until then we have to do
it this way. If you bail out Wall Street you have to bail out Main Street also.
That’s the deal now and if the powers that be don’t accept it then they run a
big existential risk.
Much went
to big business but much went to small businesses like yours and without it
they would have been in big trouble. In 2008 outside of the financial
institutions only the car companies were bailed out. Everyone else were on
their own and resulted in the weakest rebound ever and caused extreme damage to
workers, businesses and it lasted several years. This time money was given out
to individuals, small and medium businesses and big businesses and the result
is a strong rebound. Too bad it was so lopsidded in 2008. History would have
been different otherwise.
leaving Americans’ financial information vulnerable to attack, but it
could be used as a surveillance tool that Americans should never be
forced to tolerate from their own government.”